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This only works if ALL things happen. -You have the cash to buy outright. -You have an investment that you can reliably withdraw the funds from. -There isn'
by ryathal 5y ago
This only works if ALL things happen.
-You have the cash to buy outright.
-You have an investment that you can reliably withdraw the funds from.
-There isn't risk to losing principal with the investment.
-The investment outpaces inflation + interest. If inflation is 3% in your example you just lost .6%.
99% of the time these things aren't true for the 5-7 years of a loan.
- mwint 5y agoDoes inflation really matter here? The value of the loan isn’t inflated, so I don’t think inflation should “count” here? Willing to be wrong on that, just having a hard time understanding.
- SkyPuncher 5y agoI'd argue that inflation is further reducing the cost. Inflation means that $1 is fundamentally less valuable in the future than it is right now. If we're making a deal for me to pay $1 in the future, I'd prefer to make that $1 payment as far out as possible.